| It's difficult to imagine that twenty years ago there | | | | to him before acting on it. You need to be able to |
| was no such thing as buying stocks online. Before the | | | | develop a set of criteria to compare different stocks |
| Internet, all you could do was to read the newspaper | | | | before you decide on a specific one to buy. |
| trying to get enough information and then phone | | | | One way of doing this is to compare the ratio of the |
| your broker if you wanted to buy stocks. | | | | share prices to their respective earnings per share. If |
| The Internet changed the way we buy stocks | | | | a share has a price/earnings ratio of let us say 10, it |
| forever. In the first place you can now buy stocks | | | | means that the particular stock is selling at ten times |
| without ever picking up the phone. You can do it | | | | the value of the yearly profits per share. Another |
| from the comfort of our living room at one of | | | | way to look at this is that the company makes a |
| hundreds of online stock trading websites. There is | | | | profit of ten percent of the market value of its |
| still a broker involved, but you don't need to meet | | | | shares every year. |
| him or to get advice from him. | | | | Some highly popular company stocks sometimes |
| Not only did the way the actual buying or selling is | | | | have a price/earnings ratio of more than 200 to 1. |
| carried out change, there were many other changes | | | | This means it will take the company 200 years to |
| as well. Probably the single biggest change in the | | | | produce enough profits to cover the market value of |
| market was the incredible amount of information that | | | | its shares. You will certainly realize that sooner or |
| became available to investors and traders since the | | | | later such stocks might become totally overvalued. |
| Internet appeared on the scene. | | | | The trick is therefore to find an undervalued share ' a |
| For every single stock on the market you can now | | | | company where the price/earnings ratio is still quite |
| get historical prices, future price projections, expert | | | | low and for which the expected future profits are |
| analysis, company information, financial statements, | | | | much higher than what the stock price would indicate. |
| you name it ' it is available on the Internet. To an | | | | When you are buying stocks online, you most likely |
| extent we can talk about information overload. | | | | have all the necessary information to find these |
| The individual investor or trader needs to develop a | | | | stocks at your disposal ' you just have to take time |
| system to analyze this information so it makes sense | | | | to sift through it. |